How Do Timeshares Work? A Travel Guide

There’s a reason why the timeshare market is worth an estimated $28,900 million. For many people, the idea of a re-occurring vacation at their favorite destination is an enticing one.

However, despite the popularity of timeshares, there still seems to be a lot of confusion surrounding them. So how do timeshares work? And can you get out of timeshares easily?

If you want to learn the answers to these questions and more, you’re in the right place.

In this guide, we’ll cover everything you need to know about timeshares for beginners. That way, you can decide if they’re the right type of purchase for you.

What Is a Timeshare?

Before we learn how they work, it’s important to first understand exactly what a timeshare is. Timeshares are a form of shared ownership over a type of vacation property.

You’ll pay for a percentage of the vacation property. In return, you’ll be able to access it during certain times of the year. Timeshare properties can come in many different forms, including smaller units within the traditional resort and vacation homes.

How Do Timeshares Work?

Here’s how it typically works. A timeshare agreement is presented to a group of people interested in a vacation property. For the sake of simplicity, let’s say it’s a fractional ownership agreement with fifty-two different people.

Basically, the costs of the timeshare are divided between fifty-two people. In exchange, everyone gets to use the property for one week of the year. However, it’s not always that simple.

First, certain parties might pay more money to get more weeks out of the year. It also gets complicated when certain months of the year are more desirable than others in terms of weather and activities.

On top of that, there are also additional ownership and systems that can sometimes confuse newcomers. So to clear things up, we’ll be discussing these different timeshare options in more detail.

Fixed vs. Floating vs. Points-Based

The specific way a timeshare works depends on the system we used. The traditional system we described in the example above is a fixed-week system.

That means that one week out of the year, a room from a resort or similar vacation property will be available for you. Some people prefer having a definite, secured vacation plan at the same time every year.

For other people, it might not be flexible enough. If you fall into this category, you might want to consider a floating system. Instead of having a fixed week assigned to you, floating timeshares allow you to reserve a week that you want in advance.

These reservations are typically on a first-come, first-served basis. Keep in mind that your mind is restricted to certain seasons with floating weeks depending on the specific timeshare company.

Lastly, there are points-based timeshares. This type of timeshare grew in popularity thanks to things like Disney Vacation Clubs. With this system, you use points to purchase the amount of time you want at specific timeshare destinations.

The way you earn points depends on the program. With some, you’ll simply purchase the points. Others reward them with a specific plan. Some timeshares may allow you t convert your fixed weeks into points.

What Are the Different Types of Timeshares?

You can divide timeshares into two main types of categories: deeded and non-deeded property. With a deeded timeshare, you own a stake in the property that’s being shared.

These types of timeshares tend to cost a lot of money because you’re paying for ownership. More commonly, you’ll find non-deeded timeshare properties.

With this type of timeshare, you’re basically purchasing either a lease or a license that says you can use the timeshare for a certain amount of time. However, with non-deeded properties, you don’t have any stake in ownership.

How Do You Find a Good Timeshare?

Before you begin looking for a good timeshare, you should first ask yourself whether or not it’s right for you. If you enjoy vacationing in the same spot every day, then a timeshare might be worth it.

Just make sure you do your research before you sign up for one. Avoid signing up for timeshare at vacation destinations that hope to capitalize on your relaxation.

Instead, ask around your network, or turn to search engines. When you have a list of timeshare companies, read the review or contact individuals that have a timeshare with the company already.

Pay attention to what their experience was like. If they complain about high fees or misinformation when they signed up, this should be viewed as a clear red flag.

How Do You Cancel Timeshares?

Unfortunately, many timeshares have a reputation for being exploitative. Sadly, this is often the case with many developers. Often, you’ll be pitched a beautiful property with seemingly no strings attached.

Then, you’re hit with high fees, high-interest rates, and frequent assessments. Sadly, when you try to cancel it, you’re likely to hit roadblocks. If you’re wondering how much does it cost to cancel a timeshare, the answer can vary widely depending on the contract and the service you use to handle the cancellation.

All timeshares tend to make it fairly hard for you to cancel contracts. However, some are much worse than others. With any cancellation, you’re likely to get hit with high fees.

But some contracts try to legally make it impossible for you to get out of the agreement. Regardless of which type of contract you’re facing, you’re likely to need a timeshare cancellation service.

These types of businesses tend to offer two types of cancellation methods: mortgage cancellations and timeshare title transfers. The specific service you will need will depend on the nature of your contract.

So meet with someone that specializes in timeshare cancellation to find out which option is right for you.

Appreciate Learning About Timeshares? Keep Exploring

We hope this article helped you answer the question, How do timeshares work? As you can see, timeshares certainly come with some pros and cons.

At the end of the day, you shouldn’t view a timeshare as any sort of real estate investment. Instead, you should see it as an investment in your leisure.

Enjoy learning about timeshares? Keep exploring our website to find plenty of similar real estate guides like this one.